There are three ways to acquire cryptocurrencies. The first is to ‘mine’ for them using your computer. This is the digital equivalent of panning for gold and you’ll probably need to join a mining pool to stand a chance of finding anything.
It’s also likely to cost you a small fortune in electricity. The second option is to buy them from an exchange or a special ATM, which you can locate at coinatmradar.com. You don’t get physical money,
You don’t get physical money, the only digital currency which gets sent to your ‘wallet’. This could be a mobile app, an online wallet, an offline wallet or even a piece of paper.
The third method is to buy shares in a fund that’s bought Bitcoins, but this is generally considered a bad idea. Assuming you choose to go the easiest route, which is to buy them, you first need to decide on an exchange to use.
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There are a lot to choose from, including Coinbase (www.coinbase.com), Kraken (www.kraken.com), CEX.IO (cex.io) and Bitstamp (www.bitstamp.net). If you find
an exchange you like the look of, do a little research before proceeding and check to see if it’s had any security problems in the past and how those were handled (for example, Bithumb, South Korea’s largest exchange, was recently hacked but it promised to fully compensate all affected customers).
For the purpose of this project, we’ll use Coinbase. The currency you opt to buy may have some bearing here because different exchanges handle different currencies and prices can vary, though typically not by much
You now need to supply identification. Choose the type you
have – Passport, Driver’s License or Photo ID. If you don’t have any of those, click the link. You can choose to take the photo and upload it using either a webcam or mobile camera. Once that’s done, you will need to supply payment details.
How to buy cryptocurrency
Once you’ve decided which exchange to buy from, you need to perform a few administrative tasks. First, you need to verify your identity and payment method.
This process varies but it may involve uploading a photo of you holding your bank card, or a scan of the front and back of your driving license. You’re probably hearing alarm bells ringing at this stage because it’s not something any
sane, technologically savvy web user would normally do – which is why it’s important to only use a secure, well-respected exchange. The verification
The verification process can take a while, although we were trading within a couple of days of signing up with Coinbase.
The exchanges make good use of 2FA (Two Factor Authentication), so you will need to enter codes sent to your mobile. phone whenever you have to verify your
identity or you log in on a new device. You can buy currency with a debit or credit card, or via a bank transfer. Setting up a bank transfer takes a little longer because you’re allowed to buy larger amounts so the process is more stringent.
Where to get a wallet
Currency from an exchange is stored online in a wallet that’s created for you. Each currency type is stored in a
different wallet, and you can also choose to use an existing wallet, if you have one.
There’s a page on the Bitcoin site (https://bitcoin.org/en/choose-your-wallet) that lists the many different ones on offer, and Ethereum has its own
(www.ethereum.org). You can also get multi-currency wallets (https://www.cryptocompare.com/wallets) that let you store different currency types in one place.
The benefit of using your own wallet is that you’re fully in charge of it – if your exchange gets hacked and your currency is stolen, it won’t affect you if you’ve already transferred your purchases. You can buy and sell from a private wallet, and transfer currency to and from it, too.
It’s vital that you secure your wallet with a strong password. Bear in mind, though, that if you forget or lose this, then you’ll have no way of gaining access to your money.
Set up notifications
Buying and selling cryptocurrency for profit is largely about timing, so it’s worth setting up notifications in the Coinbase
mobile app (https://www.coinbase.com/mobile?locale=en-gb), which alerts you when your coin of choice hits a particularly high or low.
In the app, tap the bell icon in the top-right corner. On the Price Alerts screen, select the currency type (Bitcoin
or Ethereum), then tap the plus symbol in the top-right corner and use the slider to select a price. You can select multiple price points if you wish, which can help you determine the best time to buy or sell.
How volatile are cryptocurrencies?
The value of cryptocurrencies has gone up and down significantly in the past few years. To give you an idea of how volatile the market can be, in June 2017, Bitcoin was worth over $3,000 and Ethereum around $400. By the middle of July, Bitcoin had dropped to $2,300 and Ethereum to below $200. That might seem like quite a drop, but at the start of the year, Bitcoin was priced at around $970 and Ethereum at $8.
No matter how low the price gets, it can seemingly always go lower. But if you wait long enough, the value should
eventually, start to rise again.
Buy and sell cryptocurrency
Once you’re set up, you can begin to buy currency. Click the Buy/Sell tab and choose the type of currency you require from Bitcoin, Ethereum or Litecoin. The current price for each one is shown under its name. Select the payment method to use if you have more than one.
If you’re using a card to buy currency, you have a weekly limit of £325. If you’re making payments from your bank,
you can make purchases up to £9,000 – potentially even more. The amount available to spend is shown. Enter an
amount and click the Buy button.
Selling currency is a similar process. Click the Sell tab and choose which wallet to sell from and deposit to (in EUR or GBP). Enter an amount and click Sell. You can repeat that transaction on a regular basis if you wish.
Investing in digital currency is not without risk and the cryptocurrency market can be volatile. You might be well up on your initial investment one day, then find its value has been wiped out the next, making it worth less than it was when you started.
For this reason, although you are unlikely to lose all of your
investment’s value, you should only invest money that you can afford to lose. The trick, ultimately, is to view it as a semi-long-term investment – buy when the price looks low and sell the moment the market appears to be at its most
buoyant and when you can still make a profit on top of any fees you may incur.
Hope my article “How to get Bitcoin and other currencies” helps you to get Bitcoin and other cryptocurrencies .
Also, Check What is Blockchain and how does it work